The Art of Patience Pays for Endeavour Silver

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Under "Captain" Cooke's able command, Endeavour Silver has breezed its way through a remarkable campaign of organic growth at its pair of producing mines in Mexico. Aside from the consistent execution behind that successful growth trajectory, the achievement is remarkable for the lengthy period of research and careful deliberation that preceded this week's announcement that Endeavour will finally acquire its third producing mine. As revealed during my conversation with Cooke back in August of 2010, the company's tireless quest for mine No. 3 began more than three years ago!

Eldorado's transformational acquisition of Sino Gold certainly touched off a noteworthy and highly profitable growth spurt, but this week the company mapped out the route for an even more remarkable journey into long-term, peer-leading, and profit-multiplying growth. Because this new journey now leads our focus from China to Eastern Europe -- along the route of the legendary Silk Road -- I urge my readers to retrace this ancient trade route with me in order to examine the tremendous promise of Eldorado Gold.

And with the latest housing data showing a 5.8% drop in U.S. housing starts for March, I am concerned that recent optimism toward the sector may have been hoodwinked by that unseasonable winter weather. I remain cautious of the sector, particularly considering the force of the recent rally. Although I do not wish to own USG until I can confidently confirm a very real rebound in residential construction, that sentiment does not prevent me from admiring the means by which the company has held its own in the fight of a lifetime.

Thanks Sinch, EXK has become my favorite silver stock and I'm looking to acquire a sizable position on any further dips.

Unrelated, I don't believe I saw your thoughts on the Argentina debacle and how it may affect miner share value going forward GG, AUY come to mind... my guess is they are safe, but I'd value your opinion over mine on this issue.

This latest action certainly does raise the alert to a whole new level, and I encourage mining investors to watch the unfolding events carefully. But I have seen nothing thus far that leads me to believe a broader push of resource nationalization is afoot. As Argentina's largest taxpayer, and producer of a very strategic commodity for Argentina's growth interests, I think YPF must be considered a special case, and national policies toward it not necessarily indicative of the broader stance toward the extractive industries.

But the precedent is a damaging one. I will continue to hold each of the stocks in my portfolio with exposure to production or development in Argentina, and will continue to watch the events unfolding with interest.

"Nationalizing YPF is nothing new. In fact, this latest action represents a move toward re-nationalizing a company that spent most of its 90-year history under government control. It wasn’t until the early 1990s that Argentina, seeking outside investment in its shaky economy, put YPF up for grabs in the private market."

Ivanhoe Mines (NYSE, NASDAQ & TSX: IVN) is an international mining company with operations focused in the Asia Pacific region. Assets include the company’s 66% interest in the Oyu Tolgoi copper-gold-silver mine development project in southern Mongolia; a 58% interest in Mongolian coal miner SouthGobi Resources (TSX: SGQ; HK: 1878); a 59% interest in copper-gold miner Ivanhoe Australia (ASX, TSX: IVA), which also is developing a molybdenum-rhenium discovery; and a 50% interest in Altynalmas Gold, a private company developing the Kyzyl Gold Project in Kazakhstan.

The Oyu Tolgoi mine is in the South Gobi Desert of Mongolia, 80 kilometres (50 mi) north of Mongolia's border with the People's Republic of China, where the mined copper is expected to be shipped.[2] The Oyu Tolgoi deposits contain (as of 2010) 79 billion pounds (35,833,000 tonnes) of copper, and 45 million ounces (1,275,000,000 grams) of gold.|[3] Production is scheduled to begin in 2013 and to reach full capacity in 2018. Over the anticipated life of mine (45 years), Oyu Tolgoi is scheduled to produce 450,000 tonnes (500,000 short tons) of copper per year, an amount equal to 3% of global production. Oyu Tolgoi is also expected to produce 330,000 ounces of gold annually.[4][5]

“China has certainly driven the gold rush in Mongolia - from the giant $6 billion Oyu Tolgoi copper-gold project currently being developed by Ivanhoe Mines and Rio Tinto to the makeshift holes that honeycomb the hills and valleys of Bornuur.”